In Memory of J.D. Salinger and Brand Mystique.

I wanted to be in book publishing, not advertising, when I grew-up. So, during winter vacation of senior year at college, many, many years ago, I went to New York to interview with a pack of publishing companies (plus one ad agency).

Interviewing at one of the big publishing houses I remember asking the Editor about one of their best-selling authors and was surprised when she said, “Oh, yes, very popular. But, of course, we write most of the books today. He’s just a brand name, now, really.” (It’s interesting that you see the author’s titles in movie theatres or on TV, but not so much in book stores, these days.)

The summer before college I painted a barn with a friend of mine. One very hot afternoon his older cousin came to a screeching stop in front of the barn where we were working high up on ladders, jumped out of the car and yelled, “I’ve got Coors beer!” Down the ladders we went and thus I had my first taste of the Rockies, available only to anyone who had been there and brought it back with them.

More recently, I was in the Palm Restaurant on Second Avenue in New York pointing out to a person who was with me, “This is the original Palm.”

“Really,” he said. “Man, they’re just everywhere today, aren’t they?”

Yes. They are.

J.D. Salinger would have none of what it all might have meant to him and he died yesterday not only as one of America’s most treasured writers, but, perhaps, as the last of its mystical brands. Detractors dismiss his reclusiveness like they dismiss all oddballs. But brands depend on more than scarcity for mystique to follow. They depend on quality and – to be truly great – an attachment to quality that prevails over ambition and profit.

This is hard to do, which is what I like about the Internet: that it is held together by thousands of independent authors and publishers which in the vastness of the space are too small, or too remote, or too busy with other parts of their lives to be tempted by great expansion, so that they can satisfy themselves with patient attention to quality enterprise and stand against selling-out. Thereby they are enriched and so are we, and the Internet is sustained.

How many brands may secretly, desperately wish to retire to a village in New Hampshire to live out their days on the strength of their legacy, unyielding to the temptation to pump it up amidst the bright lights and big cities? It’s a different sort of brand luxury I suppose. But, there’s an opening now for anyone that thinks they can take it.

The Apple iPad: offering a way forward to many beleaguered publishers and content producers

The most inspired thing to emerge from the iPad launch is the notion that book publishers will be given firmer control over their pricing (“Apple Tablet Portends Rewrite for Publishers,” Wall Street Journal). For this reason, perhaps, iPad launched this week with the support of Penguin, HarperCollins, Simon & Schuster, Hachette Book Group and Macmillan Publishers (“iPad Launch; Apple Unveils iBooks”; PaidContent).

Perhaps Apple sensed the scorn of so many publishers and content producers over their treatment by third-party distributers and tech enablers – angry publishers like Rupert Murdoch that have decided to erect pay walls, and ones like CBS Interactive that have decided to dump ad networks. Perhaps in the midst of that scorn Apple sensed an opportunity. It has the brand, the device, the distribution and the objectivity to be the partner of choice for content producers. It has no portal, no ad network, no search engine, no ad exchange. It has no dog in the fight for ad dollars. It has only a gleaming, portable device and millions of loyal users.

Microsoft has wound-up in the content business. Not Apple. Google has wound-up in the network business. Not Apple. Each of them is in the media business, but only Apple doesn’t have to sell advertising – so far -which means content producers may be breathless to work with them. Indeed, Martin Nisenholtz of The New York Times was sounding pretty excited in the report in Paid Content:

“Martin Nisenholtz said that since The New York Times website is beautiful on the iPad, why bother with an application? “Well, our app for the iPhone has been downloaded three million times, and we wanted to create something that combines the best of print and digital all in one. It captures the essence of reading the paper. Articles can be saved, and read later on the iPhone.”

If you step back and squint, in order to have a dimmer view, it’s possible when looking at the whole of the media landscape to see nothing but the hunched over frames of depleted, disaffected content owners and producers worn ragged by the ungratefulness of new technology. Enter Apple with a potentially credible solution to finally help many publishers get upright again, and in the process catapult itself into the hands of millions more users eager for content relationships that you can still practically touch.

TBWA Chairman, Jean Marie Dru, joins the conversation about fixing agency compensation

In Ad Age today, TBWA Chairman, Jean Marie Dru, adds his voice to the growing chorus of people that are eager to have a conversation about the future of ad agency compensation. It must change. Ad agencies have paid the price for years of ”apparent frivolity,” but the model today, in the grip of a procurement process that has one ambition, lowering cost, leads to a dead-end. Notes Jean Marie Dru:

“It has become fashionable for everyone to blame “procurement” for their problems. It’s an easy way for others to off-load responsibility. The real decision-making, however, lies with CEOs and marketing directors. They’re merely leaving the dirty work to procurement. Procurement execs are often given no other option than to squeeze for more so-called efficiencies, year after year. In doing so, they have created a death spiral, making it impossible to attract and compensate the talents we need to deliver the value-creating ideas our clients demand.”

The danger, of course, is that if clients don’t become part of the compensation solution ad agencies will proceed with fashioning their own out of the resources available to them. One resource stands-out: media. The money is in the media; but to benefit from that fact agencies will need to be on the receiving, not just the giving, end of media dollars. They will need to be both buyer and seller, which will surely lead to a crisis of objectivity in a business whose purpose, the late Clifford Fitzgerald of Dancer Fitzgerald Sample reportedly use to say, is “to recommend.”

In this regard, Mr. Dru makes this observation:

 ”Back when advertising agencies still bought media space, I used to remind our clients of a forgotten truth. If the agency commission paid was 10% of the total advertising costs, the work produced by this 10% is what gave the value to the 100% invested. It was a good argument to fight against too-heavy revenue reductions. Today agency-fee negotiations and media-rate discussions are separated. By considering these two activities separately, our clients have lost sight of the fact that one actually multiplies the value of the other.”

It is a very good place to start the conversation: bring back agency commission.

Before the business disappears behind a smoke screen.

“Something is rotten in Denmark.” Tom Hespos challenges the ethics of agency-side audience networks

Rather sooner than we might have expected the question of agency side audience-networks, or demand-side networks, is raising concerns about ethics. Tom Hespos, Chairman and President of Underscore Marketing, who has been a leading conversationalist about online advertising since he helped found the Old-Timers list back in 1999, confronts the dilemma of buyers acting as sellers in a column for iMedia. Speaking for the concerns of many independent ad sellers Tom writes, “Something is rotten in Denmark.”

Tom asks three questions at the center of the agency-as-ad-network question:

1. Who owns the user data? Tom is ambivalent; perhaps no one.

2. Is it morally correct for agencies to be opaque with publishers and/or clients as to how they’re leveraging data? Opaque means impenetrable, not transparent. According to Answers.com, it means “to be so obscure as to be unintelligible.” Tom puts it to us as a moral question. If we are made uncomfortable by that characterization, what are our professional instincts? Is the media model of the future destined to be “so obscure as to be unintelligible?”

3. Is it okay for agencies to both buy and sell inventory to the same advertiser? Simply, can agencies serve two masters? Can anyone?

Whether you judge, or judge not, the answers to these questions are foregone conclusions. The ad network model that the new in-house agency networks seek to replace has already crashed on the rocks of the ethical and commercial anxieties it creates. Ask the publishers. Ask the agencies. Ask the privacy lobbyists. They have  given the answers: one cannot serve two masters, the future of media is not to be obscure and unintelligible and, finally, the data belongs to the user.

Perhaps the message will finally make it to the advertising clients when all this is over: HELP, we’re drowning down here, and there are no good answers for saving brand relationships in a world fragmented by technology that we can offer relying on the resources at hand.   

Agencies must be paid to create and buy advertising, not to sell it. Something must be done to fix agency compensation lest media vanish forever behind a smoke screen – and with it, intelligible contact between consumers and their brands.

Mark Cuban defends Jeff Zucker’s experiment at NBC Universal. But, has Zucker given-up on the experiment too soon?

Mark Cuban goes on a tear over at Paid Content about the flip-flop on Jay Leno’s primetime show at NBC. His contention is that NBC Universal CEO, Jeff Zucker, was bold and absolutely right to experiment moving Leno to the 10:00 p.m. slot and the world would be a better place if more people – notably corporate executive types of people – were like Mr. Zucker.

That’s worth agreeing with, although Mark Cuban seems fine with the fact that Jeff Zucker has quickly bailed on the experiment and will return everything to before, minus Conan O’Brien, who, it seems, will be a casualty. Cuban’s got some colorful gambling metaphors in his Paid Content piece (which won’t get repeated here as this is a family friendly blog) implying he applauds Zucker for also knowing when to fold ‘em. The smoke is clearly rising at NBC, however, and the cost of ushering Mr. O’Brien off the set and out the door is going to be $40 million according to the Wall Street Journal today. That’s a lot to pay to step away from the table.

I don’t know anything about TV programming and so the signs that Jay Leno’s primetime effort was doomed to fail may have been obvious to everyone inside the organization. Maybe. But, what’s been nagging at me over the course of this real life TV reality show are memories that Leno took a long time to get traction when he took over “The Tonight Show” from Johnny Carson. Back in 1992 nerves were just as raw, to the extent that David Letterman stormed off to CBS where he thumped Jay Leno in the late-night ratings for two or three years. Leno recovered and held the lead until his “retirement.”

Hence a nagging feeling that Jeff Zucker’s bold moves have not been given enough time. There is not a single, common prescriptive for developing a media audience on TV, or anywhere, except patience. Content has to be good, but one person’s good will be another person’s bad as loyal viewers of ”Late Night with David Letterman” or “The Tonight Show” will tell you. Audiences are not quick to embrace change and loyalties run deep.

In the same report, The Journal quotes Jeff Zucker from earlier in the year cautioning observers that Leno’s switch to primetime would be a “marathon, not a sprint.” It may be that the world – specifically the media world – needs more of that kind of Jeff Zucker.

Google should not be tempted to give-up the sanctity of its home page

Google is running a one-line ad on its home page - perhaps the most valuable real estate online - for its new Nexus One mobile telephone. This is notable for the reason that Google has been single-minded in preserving its home page as a temple for its brand, which seeks to organize all the world’s information and deliver it fast and reliably.

A line or two does not do much to undermine the sanctity of Google’s home page. It does not necessarily pervert the sense of mission. But these small cracks have a way of letting water in that eventually erodes foundations. Accordingly, I’m not sure I’d be as enthusiastic as Spark Partners analyst, Adam Hartung, was in the story about the event in MediaPost. Said Mr. Hartung:

“The company [Google] has something that almost seems like a religious idol. This ad demonstrates that Google is willing to change that and attack a sacred cow to step the company forward…And that’s a very good sign for investors.”

Google has plenty of irons in the fire trying to take the company forward, some of which approach science fiction. It’s tether to reality has always been its home page. Adam Hartung’s exortation to let go of sacred cows is the very sort of temptation in which the broader analyst community so often and so dangerously trades – whatever the business sector. It is a sell-your-soul kind of temptation. And it is never good for investors in the long run. 

Al Ries has practical things to say along these lines in an Ad Age piece yesterday. Google investors should read-up.

Digital Media: so simple a caveman could do it

The Ad Age staff compiled a list of challenges and pitfalls awaiting the advertising industry as it turns the corner into 2010 and the start of a new decade. Editors gave the issue of agency compensation and the role of client procurement officers prominence as the first entry on the list. Quoting Mediabrands CFO, Tara Comonte, from her remarks at the American Advertising Federation’s Hall of Achievement Awards, Ad Age summarized the issue: “Procurement wants to pay less than enough. And it will be self-destruction.”

It is an issue that deserves to be at the top of the list. The issue of agency compensation must be addressed if the industry is going to be able to afford to keep pace with the rapid advances in new media in a way that provides maximum benefit to marketers.

In that regard, further down the Ad Age list was what to look for in Digital Marketing. “In short”, says Ad Age,

“marketing on the web has not been about creating demand so much as reacting to it by delivering the right ad to the right person when they indicate they want it. This has been a boon for Google (and has given birth to 400 ad networks), and represents the best thinking of largely West Coast technologists. But it is increasingly disastrous to content industries that are watching offline revenue erode and finding no equivalent revenue stream online.”

It remains a mystery (sort of) why the media value of the Internet can be so obvious and so invisible at the same time. Ad Age reports that delivering the right ad to people when they indicate they want it has been a “boon for Google.” Yes, but this is not the invention of West Coast technologists, nor the impetus of 400 ad networks. Google’s success is tied to rules cavemen (whose primitive work got us on the right track with media as much as with the uses of fire and raw materials, we might say) understood: the right message in the right place reaches people predisposed to what you are trying to sell them. Ug.

Most ad networks evolved differently. Most pay very little regard to placement if they are paying regard to anything more than price. Those that invoke any targeting do so almost exclusively on the basis of person, not place; and not time, either, though some would argue that ”in-market” means “right time” as much as “right person.” That may be the best thinking of West Coast technologists. Hunters and gatherers, however, think differently. They fish where the fish are.

Ug. 

Google has successfully leveraged all of  the Internet’s power beginning with place, which has been the thing most responsible for the boon. One person has learned that lesson well-enough: Tim Armstrong. Hence the new and improved, comes-in-a-resealable-package, add-water-and-stir,  instant content formula of Aol. Will it work? Not like Google. It’s instant after the fact, which is an instant too late. But, the heart is in the right place: content. Place. Audience pre-disposition here (an operative word) and now (another operative word). They are both on sale, online  (you’re probably already buying them, thanks to Google) and available – as Ad Age says – in “millions of tight niches.”

The millions of niches part, of course, has been the distraction. New media is a vast place and the buying industry has been ill-equipped to navigate it.  The digital market, therefore, has a very clear stake in the future of ad agency compensation (see above). If the industry wants the Internet to emerge as a boon for itself and not just Google it must figure out how to reward planners and buyers for the work that goes into harvesting the power that Google has harvested - deliberately and transparently, not passively or non-transparently through third-parties, or by trying to find escape routes around the media nexus of person, place and time.

Maybe it’s not so simple that even a caveman could do it today. But it’s still pretty simple.

Gerry Levin and Steve Case look back on the AOL/Time Warner merger

Paid Content featured the interview on CNBC’s Squawk Box today with Gerry Levin and Steve Case memorializing (as opposed to celebrating) the AOL/Time Warner merger that took place 10 years ago this week. It is a sobering way to start-off a new Internet decade. It is also a good piece of oral history from the two people that were behind the ambitious and, ultimately, failed merger.

Case and Levin both chalk the failure to bad execution, not bad design. Levin is particularly poignant in admitting that he lacked enough “compassion” for how the further reaches of his organization would cope with the merger, culturally, and I think he’s probably right in his assessment. As an observer with plenty of ties to people inside the Time Warner company it was clear to me early on that the rank and file would stab the merger to death – probably for no good reason that they could tell. Such is the nature of bureaucracies (big or small): they will eat their young.

The interview is here. It’s a worthwhile peak at Internet history.